Farm Transformation

Building alternatives to factory farming should include helping farmers in industrial animal agriculture transition to more sustainable types of farming, including plant farming and highest welfare animal farming. Farm Transformation is a new form of combatting factory farming that has not been deeply tested, and additional exploration will be required to explore its potential more fully, but the model shows promise and is worth supporting.

This is a chapter from Farm Forward’s report, The Farmed Animal Protection Movement: Common Strategies for Improving and Protecting the Lives of Farmed Animals. “Farm Transformation” represents Strategy 16 in the report.

Summary

Helping farmers transition from raising animals in industrial systems to alternative forms of agriculture is a new strategy in the farmed animal protection movement. Current projects focus on helping farmers transition to raising plant-based food and fiber, and sustainable energy. Many animal farmers are locked in acycle of debt that makes it financially challenging to transition out of their existing industries. Efforts have not yet been made—but should be—to help farmers to leverage their existing infrastructure to transition to different forms of farming or income generation. While efforts to help farmers transition to plant-based products are well meaning, some farmers view them as derisive. This new model is promising but requires additional analysis to explore its potential more fully.

Structure of the strategy

Compassion in World Farming was an early proponent of moving animal farmers to alternative ventures, a strategy now being pursued by Mercy for Animals (MFA). As modeled by MFA, the idea is to help farmers who raise animals transition to solar and wind farming, as well as to producing plant-based foods like peas, legumes, mushrooms, and industrial hemp. In theory, fewer animals are raised for food for every farm that transitions from animal- to plant-based products.

Helping farmers make this transition is not simple, even when farmers are willing. Farm transformation work must develop viable models for farmers to earn sustainable income with new business models. This may involve the creation of new financing structures, researching and developing new agricultural methods, providing legal resources, and creating institutions for education and training, as well as transforming consumer demand and building supply chains for new products.

Analysis

It is too soon to say whether this new strategy could become a viable model for converting large numbers of existing commodity animal farmers to new forms of agriculture. Significant hurdles within this strategy include: 1) the amount of debt currently held by farmers raising animals for integrators, 2) the lack of ready-made, viable, alternative business models for these farms, and 3) lack of consumer demand for alternative products.

Large meat and poultry companies rely on farmers taking on significant debt to finance the construction, maintenance, and upgrades of their farms, and integrators reduce their financial risk by keeping farmers as independent contractors. If, for example, a chicken farmer receives an unhealthy flock of chickens from an integrator and 50 percent of the birds die from disease, 100 percent of the financial liability is borne by the farmer (not the integrator).

A report by the Office of Inspector General (OIG) of the Small Business Administration (SBA) suggested that poultry farmers should not be classified as independent businesses since chicken integrators control virtually everything about how the farms operate. If the SBA were to reclassify chicken farmers as employees of the integrators, chicken farmers would be ineligible for SBA-backed loans. Between 2012 and 2016, the SBA made $1.8 billion worth of loans to contract chicken farmers alone.1 The OIG report found that loans made to chicken farmers lost over 90 percent of their value without a contract from an integrator, meaning that these farms are not viable as independent businesses. In all, chicken farmers in the US hold an estimated $5.2 billion in debt,2 and most are locked into a cycle of raising animals for integrators to pay down the loans on their existing infrastructure. Debt held by animal farmers is likely the biggest hurdle to transforming existing animal farms on a large scale. MFA’s Transfarmation Project has started with farmers who own their operations without debt, which gives them much more flexibility to experiment with new business models.

Creating business models to which farmers can transition poses another challenge. Multiple business models will be necessary; not every farm will have enough land or soil suitable to grow, say, legume row crops, and not every farm will have enough barn space to raise industrial hemp for CBD oil production or legal marijuana. Different models of producing food and agricultural products could be created to complement a variety of geographies, assets (land and equipment), and skills of farmers.

Anecdotal evidence3 suggests that many farmers raising animals for integrators (like Tyson, Pilgrim’s Pride, etc.) are unhappy and would be open to transitioning their businesses, but there are very few alternatives due to the overwhelming consolidation within farmed animal agriculture. With so few options, farmers have little or no leverage when negotiating their contracts. If farmers had alternatives to raising animals for the largest integrators, especially alternatives that offered better pay and more security, it would likely be harder for integrators to recruit new farmers, potentially forcing them to either pay farmers better wages (likely impacting their profit or the price of their products) or shift their operations to other production models (which is costly).

One opportunity (not currently being explored within the FAPM) for farmers raising animals for integrators would be to transition to raising animals under higher welfare conditions. Several higher welfare farming companies have a waiting lists of farmers who are ready to raise animals for their product lines.

There are fewer barriers to transitioning farmers from raising animals for integrators to raising animals for higher welfare brands—similar equipment, skills, and experience can be leveraged to raise animals in different ways.

Transitioning farmers from conventional animal farming to higher welfare practices also requires addressing farm debt, some of which could be defrayed if infrastructure can be reused, but debt will likely remain a hurdle. Political solutions, for example the Farm System Reform Act, which would provide billions of dollars to retire farmer’s debt, are likely necessary to address this issue systemically.4

The farm transformation strategy is promising, though it is new and has not been widely funded. Additional analysis will be required to explore its potential more fully.

Any effort to transition commodity animal farmers en masse will require debt forgiveness or other tools that give farmers viable paths to move away from the integrator model.

Advocacy may also be necessary to push for reforms at the SBA and USDA that would make it more difficult for contract farmers to get government-backed loans to raise animals for integrators. Requiring integrators to internalize more of the risks of their business could ultimately improve conditions for animals, since meat companies may be more concerned about the care of animals if they had more financial stake in their health and wellbeing. Nonprofit programs that work specifically on transitioning animal farms include the Transfarmation Program of Mercy for Animals, the Rancher Advocacy Program of Rowdy Girls Sanctuary, and the Farm Transformation Institute.